“Bringing Technology to Life……” - Water+

1 KLORIGENKLORIGENKLORIGENKLORIGEN On-site Generation ofChlorine & sodium hypochlorite Bringing Technology to DISCUSSION TOPICSS ection I Disinfection Practices ComparisonSection II Klorigen Technical OverviewSection IIIA dvantages & BenefitsSection IIIA dvantages & BenefitsSection IV Chlor-Alkali Industry TrendsSection V OrganizationSection I Comparison of Chlorine Based Disinfection PracticesCHLORINE BASEDCHLORINE BASEDDISINFECTION OPTIONSDISINFECTION OPTIONS Pressurized Chlorine Gas Bulk Delivered sodium hypochlorite On-site Low-strength Hypo Production On-site Chlorine Gas Generation On-site High-strength Hypo ProductionPRESSURIZED CHLORINE GAS An effective and efficient broadband disinfectant Low operating cost 100 years of experience Generally accepted worldwide Generally accepted worldwide Hazard to local community due to possibility of large scale toxic release Risk management requirements and insurance increasingly add to total operating costs Pending U.

2 S. legislation is expected to restrict use and require specific training and licensing Chlorine cylinders subject to damage and theftBULK DELIVERED BULK DELIVERED sodium HYPOCHLORITESODIUM hypochlorite Safer alternative to pressurized chlorine gas Liquid is easier to contain & manage Higher and more volatile cost Higher and more volatile cost Degrades with time and temperature Injection system different than chlorine gas Special transportation & storage concerns Reliance on third party suppliers Increasingly subject to supply interruptionsLOW STRENGTH LOW STRENGTH ONON--SITE HYPO PRODUCTION SITE HYPO PRODUCTION Less dependence on third party suppliers Weak concentration: to (household bleach is ) Lower degradation rate is better for long storage periods Lower degradation rate is better for long storage periods Maintenance can be complex and frequent High capital and operating costs Outputs all un-reacted brine with the sodium hypochlorite Low grade salt results in impurities entering the water supply Excessive fouling of electrodes common and dangerous Requires significant product storage Metering equipment is specific to low-strength hypoONON--SITE CHLORINE GAS SITE CHLORINE GAS GENERATIONGENERATION Elemental chlorine gas delivered on-demand System operates at or below atmospheric pressure Safe no storage and no cylinder handling Cost effective incorporates proven chlor-alkali Technology Reliable - same process as used by major chlor-alkali companies (PPG, Olin, Clorox, Dow, Pioneer, Monsanto)

3 Addresses the political cost of keeping chlorine gas Exclusively KLORIGEN HIGH STRENGTH HIGH STRENGTH ONON--SITE HYPO PRODUCTION SITE HYPO PRODUCTION Reliable - same process used by major chlor- alkali companies Membranes eliminate routine anode fouling and acid washing Membranes eliminate routine anode fouling and acid washing Hypo generated operator selectable 5% to (trade) Eliminates need for bulk transport and excessive storage High purity sodium hypochlorite equal to or better than bulk Very stable cost structure, subject only to salt and electrical price Exclusively KLORIGEN EFFICIENCY COMPARISON(per lb of equivalent chlorine generated)15 KlorigenLow strength on-site Power (kWh) Salt (lbs)Water (gallons) sodium Contribution Comparison - Klorigen Hypo, Hypo14161820p p m N a in T reated W at erKlorigen HypoSodium Contribution Comparison Klorigen Hypo vs. Low Strength0246810121412345678910m g/L Cl2 Dos age Per MGD Waterp p m N a in T reated W at erGENERATION COST COMPARISONSK lorigen Material Cost Material UsageOperating / pounds gallons / kWhr kWhr $ / Cost Material UsageOperating / 15 / $ / poundHypo Generating CostsDRIVING FORCES FORDRIVING FORCES FORONON--SITE HYPO PRODUCTION SITE HYPO PRODUCTION Safety -Reduce or eliminate truck traffic and large quantity storage of hazardous chemical-Consistent with efforts to eliminate stored chlorine-Consistent with efforts to eliminate stored chlorine Good Community Relations-No off-site consequences- No worst case emergency planning-Reduced threat from accidents or terrorismSecure.

4 Low Cost Raw Material Supply-Salt instead of chlorine and caustic soda- Stable pricingDRIVING FORCES FORDRIVING FORCES FORONON--SITE HYPO PRODUCTION SITE HYPO PRODUCTION Reduced Cost to the City -On-site high-strength generation costs less thanbulk delivered chemical Solution Flexibility-Hypo can be generated in one central facility or in distributed modular plants - Generation can be by City personnel or private sector contract- Various capital cost recovery options available On-Demand Facilitates Steady-State Process-Hypo is always pure, and similar concentrationSection II Klorigen Technical OverviewKLORIGEN DEVELOPMENT Operating concept based on conventional chlor-alkali membrane cell process Technology , as used by major chlor-alkali companies today Process very similar to large scale chlor-alkali plants that typically produce in excess of 1000 tons of chlorine per day Equipment re-engineered by ETC for commercial and water utility markets using NSF-certified materials, robust membranes and advanced electrode Technology (DSA) for on-site applicationsKLORIGEN Electrolyzer ModuleKLORIGEN PROCESS FLOW CHARTPOSITIVEVENTILATIONHYPOCONVERSIONUN ITS afely Diluted HydrogenDischarge To AtmosphereEDUCTOREDUCTORK lorigen System LimitsChlorineBackup Eductor LineWater SupplySodium HypochloriteTo StorageVENTILATIONUNITxxx CFMMAKE-UPUNIT50% NaOHMAKE-UPUNIT50% NaOHUNITDCRECTIFIERDCRECTIFIERTREATMENTU NITTREATMENTUNITELECTROLYZERUNITELECTROL YZERUNIT480 VACP owerSALTDISSOLVERSALTDISSOLVERDCC urrentPotable WaterRecirculating(Cooling)

5 WaterSoftenedWaterSoftenedWaterFood GradeSaltKlorigen System LimitsPurifiedBrineSaturatedBrineDepl etedBrineCausticKLORIGEN ELECTROLYZERCL H+Chlorine GasHydrogen GasSodium HydroxideDC PowerDepleted BrineOH H+AnodeMembraneCathodeNa+OH BrineWaterKLORIGEN MODEL K6 (1500 gpd)KLORIGEN MODEL K6 KLORIGEN MODEL K6 WATER & BRINE TREATMENT MODULEKLORIGEN 40,000 ppdSalt Handling SystemHeatedSalt Supply TypesType of saltNaClMgCaSO4 BrAnticaking AgentsInsolubleswt%wt%wt%wt%ppmwt%Morton Culinox 999 Morton Culinox 999 Food (5 - 20 ppm)< ppmnonetracePure Vacuum Evaporated (5 - 20 ppm) - 500 SiO2, or sodium FerricyanidetraceSolar salt*96 - - - - - 2, - salt*90 - - - - - 10, - * Arsenic, copper, lead, mercury? sodium hypochlorite FEED PUMPSR emote Monitoring (WonderWare example)Klorigen M-Series SystemHypochlorite Process FootprintProcess Unit ElectrolyzerChlorine and NaOH GenerationWater SoftenerPackage with Filters24 L x 24 Wx48 H50% NaOH Drum w/PumpApproximate Dimensions(200 lb/day Cl2 System pictured)48 Dia x 45 tall300 gal Salt TankHDPE85 L x 48 W x 76 H500 gal NaOH TankHDPE48 Di a x 68 HControl Cabinet withPLC & Power Supply24 L x 24 W x 60 H14 ftSection III Features & Benefits of the Klorigen SystemFEATURES Automatic chlorine gas and/or hypo production Gas is generated on-demand at less than one atmosphere (system is at negative pressure at all times)

6 Adjustable output via local or remote SCADA control Low maintenance and operating costs with high NPVs Modularization facilitates future expansion as demand grows Operational turndown from 10 to 100 % of rated output capacity provides consistent operating efficienciesBENEFITS Retain your current disinfection practice eitherchlorine (gas) or sodium hypochlorite (liquid) Safest on-site chemical production method Fully automated minimum operator intervention Fully automated minimum operator intervention Highest salt and power efficiency of any on-site generation process Cost competitive with most treatment practices Chlorine gas process can simultaneously supply valuable sodium hydroxide at no additional costANSI/NSF 60 Required for Drinking Water Chemicals SAFETY Never more than 3 lbs of chlorine gas in the system Chlorine is at atmospheric pressure eliminating potentialfor significant toxic release as with conventional one toncylinders and tank cars System is equipped with numerous safety devices designed toshut down system if a malfunction occurs Membrane grade (very pure)

7 sodium hydroxide is producedat 15% concentration and is safer for personnel handling Chlorine gas and sodium hypochlorite are produced on-demand Safest chlorine-based water disinfection alternative available Transport, storage & handling of chlorine and hypo are eliminatedHYDROGEN BY-PRODUCT Naturally formed through electrolysis of brine Intrinsically safe moisture-laden H2 is further diluted through positive ventilation Less than 2% of Lower Explosive Limit (LEL) and safely vented to atmosphereOther Differences vs. Danger of Un-separated CellsEmployed in SystemsCarbon FootprintComparing Low vs. High StrengthProcessesExample: Equipment production capacity of 5 TPD of equivalent chlorine as sodium Constituent (lbs CO2) (lbs CO2)(lbs CO2) %_____Electricity 34,001 27,8196,182 18%Water 540 3450694%Transport (salt 40 mi) 114 6450 44%Transport (salt 400 mi) 1,143643500 44% On-site electrolytic production equals significant savings State-of-the-art membrane electrolyzer and process Technology Highest quality bleach at production costs lower than market Eliminates hazards related to pressurized chlorine handling & useKLORIGEN ADVANTAGES Eliminates hazards related to pressurized chlorine handling & use Costs are controlled and predictable dependent primarily on prevailing prices of salt and electricity as raw materials The Klorigen process resolves bromate issues in drinking water High concentration bleach provides savings in transport, storage while increasing product shelf life Reliable supply of chlorine gas or hypo without depending on third-party suppliers of caustic soda and chlorineKLORIGEN ADVANTAGES.

8 Continued Option to produce either sodium hypochlorite or chlorine gas Co-product NaOH can be employed to manage pH in chlorine gas applications Klorigen produced membrane-grade NaOH has less metal impurities and chloratesimpurities and chlorates Can produce up to 15% sodium hypochlorite concentration Materials of construction result in low chlorinated organics Utilization of food grade salt results in very low bromate levels Easily expandable, typically within original footprint Lowest carbon footprint of any chlorine-based alternativeSection IVChlor-Alkali Industry TrendsChlor-Alkali Industry TrendsNorth America Chlorine Supply/DemandTiO2 4%Water Treatment 6%Pulp & Paper 2%HCl 3%Epichlorohydrin 3%Solvents 2%Packaging 3%Fluorocarbons 3%Total Demand = 15 Million TonsSource: CMAI 2003 World Chlor-Alkali AnalysisPVC, EDC 39%Propylene Oxide 11%Inorganic/Organic 11%MDI, TDI 13%Chlorine Outlook for 2008 -2012 Long Term chlorine DEMAND outlook growth of 2 Forecasted North American capacity will fail to keep the SUPPLYof chlorine in line with expected growth Dow recently ceased merchant sales along with Formosa Dow recently ceased merchant sales along with Formosa Plastics, shintech , Bayer, Westlake and GE - all 100% captive Only 3 suppliers including PPG & Oxy primarily dedicated to VCM merchant supply mostly from Olin Chlorine (and hypo)

9 Re-packagers left to deal with higher costs, hazards, regulations, insurance and community relations issues to serve a shrinking market it s no surprise that some are exiting the businessChlorine Shipping Issues Federally mandated plan to reroute trains with hazardous cargoes around densely populated areas Higher freight rates = 100-200% increase Lower speeds, longer delivery times New rail car design = $147,000+ per car Not all rail sidings will accommodate larger (90 ton) tank cars Increasing supply interruptions and force-majeuresChlor-Alkali Industry Operating Rate and Hypo Prices90%92%94%96%Global Chlor - Alkali Operating Rate$ $ $ hypochlorite Price - $USDC omparison of Bulk sodium hypochlorite Pricing Versus Klorigen System CostsBulk HypoCostNote: Hypo Price - Left hand scale, Operating Rate - Right hand scaleSource: UBS Warburg, SRI for Hypo Price76%78%80%82%84%86%88%20002001200220 03200420052006200720082009 YearGlobal Chlor - Alkali Operating Rate$ $ $ $ $ hypochlorite Price - $USDS ource: UBS Warburg, SRI for Bulk Hypo PricingKlorigen SystemHypo VOrganizationORGANIZATION Company founded in 2001 by current management to develop and commercialize on-site electrolytic chlorine generators for water treatment and commercial sodium hypochlorite production Initially funded by private investors and management.

10 Most employees are shareholders Only company in industry building small to medium sized chlorine gas and high strength generators specifically for on-site applications up to 25 tons per day Product offerings span municipal, commercial, industrial, maritime and export marketsMANUFACTURING All systems manufactured and assembled in 99% of components are American Thermo-welded plastic components Full machine and tool shop Customized electrical designs Customized electrical designs FRP skid manufacture & assembly with 316 S/S fasteners Pre-delivery testing / certification ISO 9000-based quality control Installation support Operator TrainingPROCUREMENT OPTIONS Capital Purchase Project financing Third Party Lease / Purchase Chemical Product Supply (Build/Own/Operate) Maintenance Contract